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LIBORS all falling
inspector_monkfish
Posts: 9,276 Forumite
LONDON--The cost of borrowing longer-term U.S. dollars in the
London interbank market resumed its downward trend Tuesday after pausing Monday,
with the key three-month rate falling to its lowest level since the British
Bankers' Association introduced Libor fixings back in 1986.
Data from the BBA showed three-month dollar Libor, an important gauge of the
effectiveness of the Federal Reserve's monetary policy, fell to 0.28563% from
Monday's 0.28938%.
The three-month rate reached 4.81875% on Oct. 10 2008, when interbank market
tensions peaked.
Meanwhile, overnight U.S. dollar Libor dropped to 0.21375% from Monday's
0.2175%, holding below the upper end of the Federal Reserve's Fed funds target
range of zero-to-0.25%.
Attention turns to the Federal Open Market Committee's interest rate
decision, due Wednesday, when the Fed is widely expected to leave the Federal
Funds target range unchanged.
According to valuations in eurodollar futures contracts, three-month U.S.
dollar Libor is expected to rise towards the end of the year.
The December eurodollar contract traded around 99.56, implying BBA
three-month Libor will fix at 0.44% on the contract expiration date, Dec. 14.
The three-month BOR/OIS spread, a gauge of stress in the money markets,
widened marginally to 10.6 basis points from Monday's 10.5 bps.
The spread has tightened dramatically from its widest point of 366.0 bps,
seen on Oct. 10.
Term sterling interbank lending rates fell, with three-month sterling Libor
dropping to a new record low of 0.56625% from Monday's 0.57313%.
Three-month sterling Libor peaked at 6.3075% on Oct. 1.
Meanwhile, overnight sterling Libor fixed unchanged at 0.5025%, holding just
above the Bank of England's Bank Rate of 0.5%.
The minutes of the September BOE Monetary Policy Committee meeting will be
released Wednesday.
The key three-month euro Libor fell to a new record low of 0.70938% from
Monday's 0.71875%, while the overnight rate rose to 0.28375% from 0.27875%,
remaining below the European Central Bank's refinancing rate of 1.0%, and above
the deposit facility rate of 0.25%.
Market attention turns to the ECB's unlimited 12-month long-term refinancing
operation, scheduled Sept. 30.
Analysts at BNP Paribas said they expected the overnight rate to continue to
climb, possibly towards the 0.75%-1.00% area, ahead of the ECB's 12-month
liquidity provision.
London interbank market resumed its downward trend Tuesday after pausing Monday,
with the key three-month rate falling to its lowest level since the British
Bankers' Association introduced Libor fixings back in 1986.
Data from the BBA showed three-month dollar Libor, an important gauge of the
effectiveness of the Federal Reserve's monetary policy, fell to 0.28563% from
Monday's 0.28938%.
The three-month rate reached 4.81875% on Oct. 10 2008, when interbank market
tensions peaked.
Meanwhile, overnight U.S. dollar Libor dropped to 0.21375% from Monday's
0.2175%, holding below the upper end of the Federal Reserve's Fed funds target
range of zero-to-0.25%.
Attention turns to the Federal Open Market Committee's interest rate
decision, due Wednesday, when the Fed is widely expected to leave the Federal
Funds target range unchanged.
According to valuations in eurodollar futures contracts, three-month U.S.
dollar Libor is expected to rise towards the end of the year.
The December eurodollar contract traded around 99.56, implying BBA
three-month Libor will fix at 0.44% on the contract expiration date, Dec. 14.
The three-month BOR/OIS spread, a gauge of stress in the money markets,
widened marginally to 10.6 basis points from Monday's 10.5 bps.
The spread has tightened dramatically from its widest point of 366.0 bps,
seen on Oct. 10.
Term sterling interbank lending rates fell, with three-month sterling Libor
dropping to a new record low of 0.56625% from Monday's 0.57313%.
Three-month sterling Libor peaked at 6.3075% on Oct. 1.
Meanwhile, overnight sterling Libor fixed unchanged at 0.5025%, holding just
above the Bank of England's Bank Rate of 0.5%.
The minutes of the September BOE Monetary Policy Committee meeting will be
released Wednesday.
The key three-month euro Libor fell to a new record low of 0.70938% from
Monday's 0.71875%, while the overnight rate rose to 0.28375% from 0.27875%,
remaining below the European Central Bank's refinancing rate of 1.0%, and above
the deposit facility rate of 0.25%.
Market attention turns to the ECB's unlimited 12-month long-term refinancing
operation, scheduled Sept. 30.
Analysts at BNP Paribas said they expected the overnight rate to continue to
climb, possibly towards the 0.75%-1.00% area, ahead of the ECB's 12-month
liquidity provision.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
0
Comments
-
Combined with the devaluing £, the more I see of this, the more I feel we could see an IR cut...It's getting harder & harder to keep the government in the manner to which they have become accustomed.0
-
lemonjelly wrote: »Combined with the devaluing £, the more I see of this, the more I feel we could see an IR cut...
hehehe
by jove, you're learning !!
:D Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
I want the interest rate level to hit 0%.
Just because, well, I do. Historical and all that.
Plus I can start talking about Japan again.0 -
FYI
UK
Base Rate: 0.50
1yr LIBOR: 1.105
Japan
Base Rate: 0.10
1yr LIBOR: 0.80
US
Base Rate 0.00/0.25
1yr LIBOR: 1.27
Euro
Base Rate: 1.00
1yr LIBOR 1.24Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
Given that the UK economy is 'uniquely positioned to ride out the financial crisis' as we have been told on so many occasions I am surprised our 1yr libor is lower than the US and Europe...inspector_monkfish wrote: »FYI
UK
Base Rate: 0.50
1yr LIBOR: 1.105
Japan
Base Rate: 0.10
1yr LIBOR: 0.80
US
Base Rate 0.00/0.25
1yr LIBOR: 1.27
Euro
Base Rate: 1.00
1yr LIBOR 1.24I think....0 -
Given that the UK economy is 'uniquely positioned to ride out the financial crisis' as we have been told on so many occasions I am surprised our 1yr libor is lower than the US and Europe...
which is why i thought it needed pointing out....Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
inspector_monkfish wrote: »hehehe
by jove, you're learning !!:D
Thanks!
Er, what is it I'm learning?;)It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
Given that the UK economy is 'uniquely positioned to ride out the financial crisis' as we have been told on so many occasions I am surprised our 1yr libor is lower than the US and Europe...
Not sure if this is the right answer but would percentages not need to be applied for the exchange rates.
I would guess that the UK is always lower than the US or Euro rates for not having to deal with different currencies:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0 -
lemonjelly wrote: »Combined with the devaluing £, the more I see of this, the more I feel we could see an IR cut...
In a sensible world, yes.
In a world ruled by bankers who take taxpayers' money and run, no.0 -
LizEstelle wrote: »In a world ruled by bankers who take taxpayers' money and run, no.
i thought that was the construction workers that did that Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0
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